TIER-1

    Shubham Budhiraja [1]   Mr. A took a loan of 8 Lakhs from Bank B. Mr. C stood as guarantor in the transaction. Mr. A made default and Bank-B after declaring   Mr. A to be NPA, proceeded under SARFAESI by issuing section 13 Notice After taking physical possession, Bank- B took steps for auction sale.   Mr. A filed an application before DRT but the same got dismissed. No appeal filed before DRAT but Writ filed before High Court challenging the e-action notice for being vague for misdescription of property and for failure of auction purchaser to deposit 75% within 15 days. Hon’ble High Court allowed the Writ and set aside the SARFAESI proceedings. Hon’ble Supreme court held that auction notice cannot be set aside for mere typo errors. [2]   (i)                     It is true that the secured creditor is under an obligation to undertake the exercise a...

  Shubham Budhiraja [1] Company-A and Company-B filed scheme of merger. ROC, Regional Director (RD) filed their report that both of the companies have violated section 73 of companies act, 2013 and wrong disclosure made regarding deposits. The directors were also disqualified. The NCLT dismissed the scheme. Hon'ble NCLAT confirmed the order of NCLT and held that violation of law cannot be ignored particularly when both A & B has never replied to Show cause notice of RD. [2]   (I)                    Section 75 of the Companies Act, 2013, relates to `Damages for Fraud’, due to `failure to repay the Deposits’, accepted by a `Company’.   (II)                  The definition of `Fraud’, under Section 447 of the Companies Act, 2013, is an inclusive one and it concerns the `Affairs’ of a `Compa...

  Whether amount deposited by auction purchaser will have to be adjusted for 50% pre deposit for appeal by borrowers under section 18? [1]   whether the “debt due” under Section 18 of the SARFAESI Act would include the liability + interest?   Shubham Budhiraja [2]   (i)                     As per Section 18 of the SARFAESI Act, any person aggrieved, by any order made by the DRT under section 17, may prefer an appeal within thirty days to an appellate Tribunal (DRAT) from the date of receipt of the order of DRT.   (ii)                    Second proviso to section 18 provides that no appeal shall be entertained unless the “ borrower ” has deposited with the Appellate Tribunal fifty percent of the amount of “debt due” from him, as claimed by the secured creditors or d...

  Shubham Budhiraja [1] Mr. A filed a suit against Mr. B for specific performance of the contract. The trial court allowed the decree and directed Mr. B to perform its part otherwise return back the money. Because of Mr. A's apprehension to dispose of his properties, the court passed injunction against Mr. B to maintain the status quo.  Mr. B failed to pay the decree amount, and Mr. A field execution. In the meantime, Mr. B sold one of his property / lands to Mr. C. The executing court passes an order to auction the property and Mr. D turns out to be a successful purchaser. Mr. C filed an objection but the same were rejected. The appellate court allowed the objection. The High court in 2 nd  appeal refused the objection. The Hon'ble Supreme Court held that the objection was valid because: (a) suit was for specific performance of contract and not with respect of property, (b) Property was sold to Mr. C much prior to execution/ auction, (c) technically Mr. B was not t...

                                          Shubham Budhiraja [1] [1] Advocate, Delhi High Court, LLB, ACS, BCOM(H), Budhirajalawchambers@gmail.com ,+91-9654055315 Mr. A and Mr. B entered into a work contract to complete the work within the prescribed timeline. Mr. A made the part payment and retained 30% on account of anticipated liability. On final completion of work in 2011, Mr. A issued the balance payment after deducting 30% and asked Mr. B to justify the delay to get a waiver. Mr. B justified the same and issued the legal notice for recovery of Rs. 37L withheld by Mr. A in 2015. Mr. A in reply (for first time) contended that the aforesaid withheld was on account of penalty clause. Mr. B invoked the arbitration. Mr. A took the plea of limitation that claim is time barred. The Ld.  arbitrator dismissed the Section 16 application and held that the claim is not t...

  Shubham Budhiraja [1]   Mr. A, resident of Himachal Pradesh entered into an agreement with B, company for non-agriculture purposes. Because B failed to obtain the permission from state govt as per Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972. So, B, the purchaser, assigned the rights to C, an agricultural person for the same purpose. C filed a suit against A for specific performance. Trial court dismissed the suit because C being an assignee cannot succeed because of the essential condition of state govt. approval was not taken by A. The assignment was unilateral. The High Court dismissed the appeal and refused to condone the delay of 250 days. The reason for condonation was shortage of funds to pay court fees. Hon’ble Supreme court held that this is not sufficient ground particularly when appeal was filed with no application u/s 149 CPC regarding court fees. It is on the contrary that the court fee was made good. Even on merits, the assignmen...

Shubham Budhiraja [1]   Mr. A has taken a loan from the Bank for Rs.3,00,000/- for the purchase of the vehicle. The Hypothecation cum Loan agreement was entered between the parties. Mr. A made defaults and Bank unilaterally appointed the arbitrator and arbitrator passed an award of Rs.4,00,000/- in favour of Bank. Mr. A challenged the award on the ground that the arbitrator was biased because he has been the arbitrator in many cases for the Bank. Thus, non-disclosure under section 12(1) The Ld. Commercial Court dismissed the petition holding that onus is on Mr. A to show the number of arbitration that arbitrator has conducted. The Hon’ble High Court in First Appeal under section 37 set aside the award holding that disclosure under Section 12(1) is mandatory. The onus is on the arbitrator to disclose the particulars to have integrity in the arbitration. The award is also set aside for unilateral appointment. [2]   (i)         ...